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trades, ought to address these issues at least within the first 242 years of a new administration.

Ms. MIKULSKI. Mr. McCloskey, I would like to reclaim my time. Mr. McCLOSKEY. Yes, I am sorry.

Ms. MIKULSKI. To pick up on Mr. McCloskey's point, in the early days when the witnesses testified, we asked what these plans were, we were told that they were under study. We were told that there was an internal task force being coordinated by OMB, and a vari. ety of other things.

We were assured that we were going to be, number one, kept abreast of the strategy that was developing, or the policies that were being formulated, and no later than a year ago, or they said a year, we were going to have the strategy. So we do not want you to feel that this is some kind of spring hazing coming up on Capitol Hill, where it comes like an annual event, and we have our little words with you, and then off we go.

This is really a source of great frustration, and I know that what we are really emphasizing is to take the message back and say where is this work that we have been promised. I think we have really reached our saturation point.

I am sorry that you had to bear the somewhat tart remarks, but that is the intensity of the level of frustration because of this thing that has been pervasive

Mr. WOOLSEY. I completely understand, Congresswoman, and I appreciate your remarks.

The CHAIRMAN. Mr Sutter?
Mr. SUTTER. Thank you, Mr. Chairman.

Mr. Secretary, I am a little puzzled by the dialog that you held with Mr. McCloskey, the ranking minority member, concerning the national security utility of these dry bulk vessels.

Perhaps the best way to approach the problem is in the fiscal year 1980 budget you are proposing to us; construction subsidy to aid in the construction of three of these dry bulk vessels.

My understanding of the authority under that is 501(b) of the Merchant Marine Act, and perhaps I could read it, and then you could agree with me or disagree with me, as to what procedure you use. Section 501(b) states:

The Secretary of Commerce shall submit the plans and specifications for the proposed vessel through the Navy Department for examination thereof and suggestion for such changes therein, as may be necessary or proper in order that such vessels shall be suitable for economical and speedy conversion to a naval or military auxiliary, or otherwise suitable for the use of the U.S. Government in time of war or national emergency.

Now, is that the procedure that is followed by the Navy?
Mr. SUTTER. Thank you, Mr. Secretary.
The CHAIRMAN. Further questions?
Mr. McCLOSKEY. Mr. Chairman, I do have one.

This is a philosophical question, Mr. Secretary. At present the trade and national security aspects of our maritime policy are governed by sub-cabinet officers. The Secretary of the Navy has been reduced from a cabinet Secretary to an Assistant Secretary; the Maritime Administrator is one of the Assistant Secretaries of Commerce. With the Russians entering into maritime competition

with us and the concerns that this committee and the Navy have in that regard, in your personal opinion, would it be appropriate to elevate the consideration of our trade, our Navy, and our maritime problems around the world to a full cabinet office level?

Mr. WOOLSEY. Congressman, I cannot speak for the structure of the Maritime Administration's posture, cabinet or subcabinet level, or the desirability of it. From the Navy Department's point of view, the Secretary is an Executive Level 2, the same level as a Deputy Secretary of Defense, or Under Secretary of State, and heads a military department comprising roughly 1 million people, and $44 billion budget annually. His position is one of being a very close adviser to, and he participates with, the Secretary and Deputy Secretary of Defense in making decisions related to military naval matters. For the Navy and merchant marine, this is, I think, appropriately structured.

I believe it would be difficult for the Secretary of Defense, or any Department of Defense, to adequately advise the President and serve its function of overall coordination of the military aspects of national security if there were a separate-a separate navy or maritime department and the Navy was part of it, outside of the Department of Defense. I would hasten to say, Congressman, that the first man to hold my job, James Forrestal, felt very differently, at least until he became Secretary of Defense.

Even then, the issue that was fought out in those days, of whether or not we should have had defense consolidation, was very much centered around the Navy's desire to be separate. But for better or for worse, the country made that decision in 1947 with the National Security Act, and I do not think on the whole it has operated badly.

Mr. MCCLOSKEY. Well, I do not quarrel with that decision. But today, at a time when foreign trade and international commerce have reached a position where they may be as important to our national security as the military strength of our Navy, when we find a lack of coordination between the Navy and the merchant marine, and we find we need to build up the merchant marine in order to accomplish our trade and national security objectives, I have difficulty with an administration which proposes that we have a new Cabinet Office for Education, where there is little Federal concern, when we have the inability to coordinate our maritime trade and the national security objectives at the Cabinet level.

I think whatever else has been disclosed by your testimony, there remains a glaring lack of coordination between the Navy, the merchant marine, and our trade policies.

Now, the Soviets have no such lack of coordination, and if they remain our primary opponents, it seems to me that the U.S. Government, particularly the Navy, has a vital stake in seeing that there is a coordination between our Navy, our merchant marine and our trade policies. It seems to me that somebody ought to take an overall look at the national security problem of trade, merchant marine, and the Navy. They tie together, and if that is not being done at the sub-Cabinet level, I just invite your attention to the possibility of Cabinet level office, perhaps operating as the Special

Trade Representative does now, to try to coordinate trade, the merchant marine and the naval interests.

Thank you.
The CHAIRMAN. The committee will sit through the quorum call.

Thank you, Mr. Secretary, we appreciate your cooperation this morning.

Mr. WOOLSEY. Thank you.
[The following was submitted:]



Question #1

During the course of the hearing, you were reguested to answer_"yes" or "no" to the following question: "When the selection_of_ships was made this year for maritime subsidy, did the Navy_play any part in selecting the mix of ships that would be required as an auxiliary to the Navy in time of war?". Would you please expand on your response. Response: Both the mutuality and divergence of interests between the Navy and MARAD must be recognized. In shipping, the Navy's mission requires the building of combat and support ships which could not be competitive or useful in the shipping trades. MARAD is, of course, commercially oriented. Therefore, we tend to center our expertise on the Navy's mission_ships and look to MARAD to take the lead in the private sector. It is the private sector that provides us with the merchant ships we need. As you know, we review the concepts and plans for the construction of merchant ships to make these ships more adaptable and useful for military purposes. However, in coordination with MARAD, we have engaged in such R&D projects as the Merchant ship Naval Auxiliary Program (MSNAP) to develop means to make containerships useful in fleet replenishment. Also, we collaborated with MARAD in their project to develop a Mobilization Ship Design. We have worked together to provide astern refueling rigs for fast cargo ships. Finally, as projects of mutual interest have arisen, they have been considered by the NavyMaritime Policy Board, or its predecessor organization.

Question #2

During the course of the hearing, the following dialogue took place between you and the Ranking Minority Member:

"Mr. McCloskey. Mr. Secretary,...I am not ce ain... whether the Navy plays any part at all in the selection of the ships to be constructed. Does it or does it not?


"Mr. Woolsey. We concur before the subsidy is granted, Congressman, but that concurrence has been quite regular, as long as the overall numbers in the merchant marine are as low as they are.

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In this regard:

a. What is the statutory authority for the socalled roles_played by the Navy in the selection of ships to be constructed with the aid of Construction-differential Subsidy?

b. Please explain in detail the normal procedure followed by the Navy and the Maritime Administration in this regard.


Is_there any reason why the Navy's "concurrence has been quite regular"?



The statutory authority is contained in Section 501 of the Merchant Marine Act of 1936 (46 USC 1151).

b. Navy_makes suggestions on conceptual or preliminary designs received from MARAD where CDS is involved. The objective here is te embedy National Defense Features (NDF) at the earliest practical stage. This is followed by the receipt of the actual plans and specifications which are reviewed and further suggestions are made if required. The items involved include compartmentation, speed, shock resistance, electrical power, distilling capacity, propulsion sy: cems, washdown capability, additional personnel spaces, communications capability, cargo handling gear, and related equipment. We have recently revised our procedures for the review and approval of merchant ship designs. These procedures are exhaustive and in some detail.

It must be recognized that practically every merchant ship constructed contributes to our national security. While not all ships are directly useful for the Department of Defense, the remainder support our national economy and the private sector industrial base. It is this sector that provides our weapons and materiel for national defense.


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